Respectfully, I disagree with the absolutist view that policing and banning is /never/ a good idea. Phishing is rightfully unlawful, and its wholly appropriate for the mechanisms of society to fight against it.
There is a balance to be made for sure, but in the case of both domain and app names, I'd argue that the harms from fishing outweigh the freedom of expression conferred by being able to register "Αpple.com". While the names of things do carry some expression, things have names primarily so you can tell them apart. Its a well settled moral principal that we should have rules to preserve the utility of names as monikers, and that its entirely possible to construct rules for that purpose that have a negligible effect on freedom of expression. If you disagree, then show me the developed country that decided it didn't need a trademark law.
Your hypothetical German expat in India is welcome to try to convince the Indian authorities that the ability to register können.in outweighs the value in preventing amazön.in from being registered. Maybe there are more Germans in India than I know, or maybe phishing causes less economic harm in India than it does in the US.
App store names are harder, because you don't have TLDs giving you a hint to what language(s) most of your users speak. But you can still disallow mixing of Latin, Green and Cyrillic alphabets; you can still say that if you are going to use the crazy accents used in Vietnamese, that you can't also use umlauts; you can still whitelist unicode characters as needed, so that you don't have a dozen different spaces and dashes for no reason; you can still use other signals to give language hints. And as it turns out, most people running app stores have a large pile of money they can use to curate and maintain good automated rules, and hire people to manually audit names when the automated heuristics think its fishy but not fishy enough to automatically disallow, or in response to complaints.